Correlation Between SYN Tech and HIM International

Can any of the company-specific risk be diversified away by investing in both SYN Tech and HIM International at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SYN Tech and HIM International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SYN Tech Chem Pharm and HIM International Music, you can compare the effects of market volatilities on SYN Tech and HIM International and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SYN Tech with a short position of HIM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SYN Tech and HIM International.

Diversification Opportunities for SYN Tech and HIM International

0.68

Correlation Coefficient

SYN Tech  HIM International

Poor diversification

The 3 months correlation between SYN and HIM is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding SYN Tech Chem Pharm and HIM International Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIM International Music and SYN Tech is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SYN Tech Chem Pharm are associated (or correlated) with HIM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIM International Music has no effect on the direction of SYN Tech i.e., SYN Tech and HIM International go up and down completely randomly.

Pair Corralation between SYN Tech and HIM International

Assuming the 90 days trading horizon SYN Tech Chem Pharm is expected to under-perform the HIM International. But the stock apears to be less risky and, when comparing its historical volatility, SYN Tech Chem Pharm is 1.41 times less risky than HIM International. The stock trades about -0.06 of its potential returns per unit of risk. The HIM International Music is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  11,750  in HIM International Music on October 23, 2024 and sell it today you would lose (50.00) from holding HIM International Music or give up 0.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

SYN Tech Chem Pharm  vs.  HIM International Music

SYN Tech Chem

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SYN Tech Chem Pharm has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, SYN Tech is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

HIM International Music

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HIM International Music has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, HIM International is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with SYN Tech and HIM International

The main advantage of trading using opposite SYN Tech and HIM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SYN Tech position performs unexpectedly, HIM International can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in HIM International will offset losses from the drop in HIM International's long position.

The idea behind SYN Tech Chem Pharm and HIM International Music pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.